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Switzerland's Burkhalter 'Astonished' By Alleged US Tax Tricks

by Ulrika Lomas, Tax-News.com, Brussels

14 June 2013


Swiss Foreign Minister Didier Burkhalter has underlined his astonishment at allegations that US secret agents used underhand means to recruit a Swiss banker, to gain access to secret banking information for the purposes of tracking down cases of tax evasion by US citizens.

According to whistleblower Edward Snowden, US CIA officials plied the Swiss employee with drink before persuading the banker to drive home. Once apprehended and arrested for drink driving, the undercover agents offered assistance in return for tax data from the Swiss bank.

Burkhalter revealed on SRF radio that Switzerland has already submitted a request for further information and clarification on the issue to the US embassy. The Swiss Foreign Minister made clear that Switzerland would not take action until the Confederation is in full possession of the facts. He nevertheless emphasized his surprise at the shocking allegations, warning that, if confirmed, they would constitute a breach of the Vienna Convention on diplomatic relations.

Foreign Minister Burkhalter concluded by conceding that the disclosure would certainly not help to ease tensions between the two countries but underlined that, so far, nothing has been proven.

The revelations could not have come at a worse time. Switzerland and the US are on the brink of a settlement deal to resolve their longstanding bitter dispute over the precise role of Swiss banks in assisting US clients in evading their tax obligations in the US.

At the end of last month, the Swiss Federal Council adopted a bill designed to resolve the issue. The "Federal Act on Measures to Facilitate the Resolution of the Tax Dispute between Swiss Banks and the US," would permit all banks that wish to resolve their relationship with the US authorities to cooperate with the US Department of Justice (DoJ), based on a framework specified by the DoJ.

The Swiss Federal Department of Finance pointed out that if banks were not authorized to cooperate with the US authorities, the initiation of further criminal investigations or charges concerning banking institutions could not be ruled out. The uncertainty for the financial center would continue to exist, the FDF added.

TAGS: compliance | Finance | tax | tax compliance | tax avoidance | banking | Switzerland | United States | individual income tax

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